Macroeconomic Effects of Prelected Population Aging in Industrial Countries

Paul Masson and Ralph Tryon

No 1990/005, IMF Working Papers from International Monetary Fund

Abstract: The effects of population aging are examined with the aid of a theoretical model and simulations of MULTIMOD. An older population will consume more of aggregate disposable income, require higher government expenditure, and decrease labor supply. These effects should raise real interest rates and lower the capital stock and output. Effects on current balances will depend on the relative speed and extent of aging. Simulations of projected demographic changes suggest that by 2025, real interest rates would be increased by several percentage points and net foreign assets increased in the United States, and decreased in Japan and Germany, as a result.

Keywords: WP; capital stock; saving rate; government expenditure; government spending; real interest rate rise; dependency ratio; equation estimate; result real GNP; net effect; consumption ratio; ratio of dependent; GNP ratio; consumption expenditure; consumption effect; Real interest rates; Aging; Private savings; Real effective exchange rates; Global (search for similar items in EconPapers)
Pages: 32
Date: 1990-01-01
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Citations: View citations in EconPapers (24)

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Related works:
Chapter: Macroeconomic Effects of Projected Population Aging in Industrial Countries (2019)
Journal Article: Macroeconomic Effects of Projected Population Aging in Industrial Countries (1990)
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